Morning Brief – Monday 12th

Monday 12th Nov 2018

A Remembrance Sunday to Forget:

The gravitas of yesterday’s Remembrance services were not enough to spare the fortune of the Pound throughout the Asian session last night and into this morning’s European session. Following another disappointing week for Brexit last week, CFTC data recorded yet another surge in net short Sterling positions, reflecting growing concerns about the progress of negotiations. On Sunday, Democratic Unionist Leader Arlene Foster reaffirmed her party’s intention to vote against a Brexit deal resembling May’s incumbent Chequers-based plan. This news led to an impression at market open of Brexit stagnation and domestic political instability as the impression of Theresa May’s minority Conservative government deteriorated. The rally in Brent Crude and WTI Oil at market open this morning gave yet more support to an already strong US Dollar. EURUSD continued to rally down below 1.1250; reaching the lowest rate in over a year. Once again on Sunday, the Italian Prime Minister reaffirmed the incumbent coalition government to remain within the Euro. However, the commitment gave yet another reminder of the risk that Italy poses to the fiscal stability of the Eurozone and the monetary governance of the ECB. For yet another consecutive day, the Euro has fallen.